Daniel Willis: A new direction to help people in over their heads

On Thursday, an offshoot of Occupy Wall Street called Strike Debt is launching a campaign, the Rolling Jubilee, with an online telethon variety show called The People's Bailout.

Based on that first sentence, I'm sure a significant percentage of you are looking for another article or composing an angry letter to the editor in your head, but hear me out. Once you cut through the politically charged terminology and the political baggage the Occupy association brings, this group is proposing what may be the most effective, efficient economic stimulus in recent history.

The way this new plan works is this: The money raised with this telethon and other activities will be spent on the secondary debt market buying loans, usually in default, at random. This costs, on average, about 5 cents per dollar of debt. The debt will then be forgiven outright.

What proposal for economic stimulus promises a 20-to-1 multiplier on investment? We're usually lucky to get 1-for-1 with bureaucratic expenses and inefficiencies on distribution. At 20-to-1, the $25.1 billion not expected to be repaid from the auto industry bailout could cancel out 59 percent of the credit card debt in the United States.

A dollar in tax cuts does not immediately free up $20 to be spent; $1 to a job creator does not give $20 to an employee in a matter of days. It's unheard of.

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And that's just the cold, hard dollars and cents. Eliminating debt doesn't just convert a person's monthly payment into disposable income they can put back into the economy. It takes a weight off a person psychologically so they feel comfortable putting money into the economy. The things that go first when times are tough -- travel, consumer goods, even a night out at a local restaurant -- would also be among the first to come back without the specter of debt looming, creating jobs at a local level.

Admittedly, it won't solve the underlying problems that created the financial collapse. And, admittedly, some people will certainly make the same mistakes again and fall into the same trap. There are a multitude of reasons people end up over their head in debt and a lack of personal responsibility is certainly one of them.

Those people won't be helped, but at the very least it will inject a great deal of money into local economies. But that's only part of the story. For the rest, this is a rare intersection of finance and humanitarianism, of economic stimulus and social stimulus.

Others won't make the same mistake again. Some people got into debt not through irresponsibility but due to being laid off, getting sick or suffering some other personal tragedy. Some people made a mistake and learned from it. For those people, it's a new lease on life. A second chance.

I'm not advocating that you donate money to the Rolling Jubilee. If you do, that's your right. It's a brilliant plan and I have no reason to doubt ﻿its intentions, but I certainly understand that people might have reservations, considering their Occupy affiliation.

What I am advocating is that this happen. Whether it's from a charity effort like the Rolling Jubilee, a government program to get money flowing through the economy, the efforts of extremely wealthy philanthropists like Bill Gates or Warren Buffett or any other method, this is a plan that should be explored.

Contact wealthy individuals and charities and suggest they follow Strike Debt's plan. Contact your senators and representatives to suggest that a percentage of future stimulus packages go toward the purchase and dismissal of debt on the secondary market. Put the idea in the heads of people who can make it happen.

It's no-lose. Worst case, it helps people over their heads in debt. Best case, it helps us all.